The Birth of Regulation – Part Two – The Birth of the Civil Aeronautics Board – May 22, 2009

We continue with the micromanagement of public corporations and will wrap it up and move forward next week with a subject much more interesting. That having been said I would like all aviators to connect with their roots and one of the ways they can do that is by using the “Third Dimension Blog” as a resource.

Quote of the Week

“My airplane is quiet, and for a moment still an alien, still a stranger to the ground, I am home.”— Richard Bach “Stranger to the Ground “1963

The Birth of the Civil Aeronautics Board

In 1940, the Roosevelt administration reorganized the entities created by the Civil Aeronautics Act of 1938 and solidified the powers of the CAB over the airline industry. The CAA and the CAB now constituted a formidable political subsystem that created a mutually beneficial alliance between the CAB, the airline industry and key congressional committees and subcommittees. The stability of this subsystem proved to be a primary impediment to the creation of the FAA but the FAA did end up being the winner of this turf battle.

Regulated stability was a costly venture. Airlines could not respond quickly to changes in demand, wages were high, and supply exceeded demand. Airlines routinely operated at load factors less than 50 percent, and the protected environment kept prices high. Demand for flights was low, and as a result, air travel was only available to the affluent few who could afford it.

It is fair to say that in the 21st century, it is hard to imagine the U.S. Government introducing legislation with the core belief that competition had to be restricted or eliminated in any industry—or is it? However, there was a real need for this concept initially because of the pending world war. Still, to have this type of legislation stay in place for forty years was clearly the wrong decision, and when President Jimmy Carter finally dismantled the CAB with the Airline Deregulation Act of 1978, the trunk carriers of the protected era paid a heavy price.

I know that I have been brief in the presentation of facts surrounding the Air Commerce Act of 1938 and the CAB, but I have done so purposely. It can be all too easy to become entwined in the minutiae of the bureaucracy of the US Government during the thirties and forties, so for now I think we will stop it here.

Next week we will look at the airplanes that made commercial aviation possible. Until then, take some time to look back, connect with your past and remember as an aviator you are a “Gatekeeper of the Third Dimension.”

Protect your profession, your future and the future of your fellow aviators.

Robert Novell

May 22, 2009